Further Reading

Comcast has argued that the data Netflix sends into its network creates an imbalance that should be rectified by payments from Netflix and its transit providers like Cogent. Netflix decided to pay Comcast—but Cogent has held out.

Today, Cogent CEO Dave Schaeffer made a different argument, saying that Comcast is the one who should be paying for connectivity. He did so while testifying in front of a House Judiciary Committee hearing on Comcast's planned acquisition of Time Warner Cable.

Schaeffer pointed to the fact that Comcast is not considered to be a so-called "Tier 1" network. There are a dozen or so Tier 1 networks that make up the closest thing the Internet has to a backbone. Tier 1 networks can reach every part of the Internet simply by peering with one another. Other networks buy "transit" in order to access the rest of the Internet. Peering is a point-to-point connection only, which doesn't necessarily guarantee passage of traffic to any networks beyond the two involved in the connection.

"Comcast does not operate a global network. In fact, it should be buying connectivity to the global Internet but has used its market scale and scope to extract an unusual concession," Schaeffer told members of Congress. "It wanted free connectivity, peering to the Internet, even though it didn't operate a global network. It didn't carry its fair load. Because it represented so many customers, backbone operators like Cogent and others agreed to peer with them. That wasn't good enough for Comcast. As Comcast's market power continued to increase and consumers had less choice, they actually started demanding payments for connectivity. A larger Comcast will be able to demand even greater payments."

While Comcast obviously doesn't buy transit from Cogent, it does purchase IP transit service "from Tata Communications in order to reach networks with which it does not have peering arrangements," according to economist Gregory Rose's 2011 analysis of a peering dispute between Comcast and Level 3. Rose pointed to a 2010 post by Internap network architecture manager Adam Rothschild, which said, "Comcast runs its ports to Tata at capacity, deliberately, as a means of degrading connectivity to networks which won’t peer with them or pay them money."

In some cases, Comcast actually sells transit. With Netflix, Comcast is receiving payment for peering only.

In today's congressional hearing, a joint written statement by Comcast Executive VP David Cohen and TWC CEO Robert Marcus said that "Comcast has a long record of working cooperatively with other companies on interconnection, peering, and transit."

"Importantly, no content provider is ever compelled to interconnect directly with Comcast’s or TWC’s ISP networks," the testimony said. "Comcast in particular has over 40 settlement-free routes and 8,000 commercial arrangements, which include dozens of substantial paid peering and transit arrangements with CDNs, ISPs, and major content providers which bring content to Comcast’s ISP network for delivery to Comcast’s customers. The overwhelming majority of content from across the globe comes into Comcast’s ISP network over its settlement-free connections with its peers, without the content provider having any direct relationship with Comcast. Those connections are always an option for every content provider, and they are always open—in fact, they are the lifeblood of Comcast's Internet business because they are also how Comcast gets its customers’ content to and from the rest of the world."

"The combination of Comcast’s and TWC’s ISP networks, which will account for less than 40 percent of the 'fixed' ISP market, will not come close to enabling the combined company to adversely affect competition in the interconnection market," the testimony also said.

Schaeffer claimed that Netflix was forced into signing a contract with Comcast. The cable company disagreed with that assessment, saying that Netflix's interconnection agreement with Comcast "is neither novel nor unusual. And, in fact, Netflix has recently followed up this direct interconnect agreement with a similar agreement with Verizon."

In a statement to Ars, a Comcast spokesperson said, “The backbone and transit markets today are very competitive and nothing about the Comcast/Time Warner Cable transaction changes that. Any issues in the transit market have nothing to do with this deal. For years, Cogent has been embroiled in disputes around the globe, from France, to Sweden, to China and here in the US with multiple providers. The company has a history of taking advantage of agreements and attempting to cry foul. This is no different from the business disputes they’ve had with ISPs and others for over a decade. Comcast has always been willing to enter into industry standard and commercially reasonable agreements with Cogent and similarly situated companies.”

Comcast also said that non-Tier 1 networks have built up enough backbone infrastructure that they don't necessarily have to buy transit anymore—instead, they can trade transit with Tier 1s. The Comcast/Tata arrangement is "not a straight paid transit deal," Comcast said.

Comcast argued that it could be considered a Tier 1 itself, as less than one percent of its traffic requires transit.

In a background call with Ars, a Comcast official also said that Comcast has settlement-free peering deals with all the Tier 1 networks. Although home Internet service is typically unbalanced with most traffic heading toward consumers, Comcast also carries streaming traffic for its subsidiary, NBC, and for many business customers including Web services, content delivery networks, and universities. This balances out Comcast's traffic exchanges with Tier 1 networks, with Cogent being the major exception because of how much Netflix traffic it carries, according to Comcast.

Additional testimony in today's hearing brought up other competition concerns, including some regarding sports programming.

"A merged Comcast and TWC would have both the ability and incentive to withhold sports, entertainment, and other programming from other multichannel video programming distributors ('MVPDs') and harm competition," antitrust attorney Allen Grunes' testimony said. "The reduction in competition would lead to less pressure to control cable bills or to develop new offerings."

Grunes also said Comcast's proposed divestitures of customers won't ease harmful effects. "While the overall number of subscribers held by the merged entity would be lower as a result of system sales to Charter," Comcast will gain subscribers in New York and Los Angeles. "Comcast is not planning to shed subscribers in the most valuable markets. Further, the proposal does little to reduce the parties' share of the high-speed broadband market, which would remain well over 30 percent."

There was also testimony from Patrick Gottsch, founder and chairman of Rural Media Group, which operates numerous rural TV channels, including RFD-TV.

"Following its merger with NBCUniversal, Comcast dropped RFD-TV in all of Colorado and New Mexico," Gottsch said. "Because there is no clear business reason to understand Comcast's decision, we can only speculate that RFD-TV has become competitive with Comcast's affiliated programming."

Cohen countered that customers who want RFD-TV can switch to Dish or DirecTV.

Editor's note: The original version of this story incorrectly referred to David Cohen as Comcast's CEO.

Comcast (the ISP arm of the corporation anyway) generates no content I desire. Everything I want to consume (Netflix, Ars, etc) exists beyond their network. They should be the ones forking the cash out.

Also, settlement free peering is based on a 1:1 (or close) amount of traffic in either direction, other carriers have already said Comcast consumes far more then they generate. So lets cut off the free ride for them.

Comcast (the internet arm of the corporation anyway) generates no content I desire. Everything I want to consume (Netflix, Ars, etc) exists beyond their network. They should be the ones forking the cash out.

Exactly this. Comcast profits from Netflix and everyone else on the Internet already. Comcast is merely a middleman, but unfortunately the ISP space is pretty much a bunch of regional duopolies (occasionally monopolies), so they can get away with these anti-user practices.

No no no guys. Netflix just throws traffic as fast and as indiscriminantly as it can into Comcast's network. Comcast's network engineers then have to pull the traffic out of the tubes and untangle it to send out to the customer that asked *Comcast* for the video. Comcast is clearly doing all the work here and deserves to get paid by everyone.

ISPs should should pay for their side of the connection and all the costs that go with it, just like I pay them for my side of the connection, and the entity I'm requesting data from is paying for their side of the connection.... If they don't think they should pay for incoming data, I don't see how they should expect me to pay for incoming data...

Remember how some networks stopped delivering their shows to certain cable companies over pricing disputes? Or vice-versa?

I bet if the large content providers [Youtube, Netflix etc] stopped delivering for a week to any network that wanted to charge them extra for delivering content to the ISPs customers [that the ISPs own customers requested], maybe just put up a message to the customers saying something to the effect: "Due to un-fair and unrealistic demands by their ISP, $CONTENTPROVIDER can not deliver content to you. Please contact your ISP and demand that they treat all customer requested traffic fairly."

The ISPs would change their tune very quickly.

Not to say that it wouldn't cost the content providers a little bit but ISPs like Comcast think they hold all the chips, but the truth is that the ISP is just an access point, and if they can't or won't deliver the services that the customer wants, then the customer will likely decide they don't need to be paying for it, whether they move on to a competitor [in the rare cases where one is available] or decide it's not worth paying for at all.

I know it's not a perfect idea, but dammit, somebody needs to smack the ISPs and tell them to get their collective heads out of their collective asses and I don't have any better ideas of how to do that.

Comcast *should* pay. They somehow tricked a bunch of Tier1 and Tier2 ISPs into peering with them or paying them instead, and now are defending their position.

It's their providers fault for agreeing to peer with them to begin with.

I hate Cogent, I've made that very clear here on Ars, but if they or anyone else is paying Comcast, they're idiots for doing so. Tell Comcast to get bent, and their users will eventually complain -- and perhaps even get the courts involved to settle this "what we advertise vs. what we sell" issue of "I pay for bandwidth/the internet."

Without competition it's never going to be Comcast's economic intrest to do anything that doesn't make them more money. The problem is not going to go away with "net neutrality" or any "common carrier" regulation you can muster up. The only way to force Comcast to behave is to have a competitor that provides better and cheaper service just like it was with the long distance telephone market.

The more they tighten the noose, the more people will turn to alternate forms of programming. It will be inconvenient in the short-term, but I say: "Bring it on, Comcast!" Irritate so many people that disruption is inevitable finally!

I bet if the large content providers [Youtube, Netflix etc] stopped delivering for a week to any network that wanted to charge them extra for delivering content to the ISPs customers [that the ISPs own customers requested], maybe just put up a message to the customers saying something to the effect: "Due to un-fair and unrealistic demands by their ISP, $CONTENTPROVIDER can not deliver content to you. Please contact your ISP and demand that they treat all customer requested traffic fairly."

The ISPs would change their tune very quickly.

I agree it's worth a try.

Customers would start a riot.

But netflix/youtube/etc will almost certainly never do it. They, too, are profit seeking corporations. Don't forget that. In fact if netflix tried it without notifying paying customers well in advance, they'd probably get sued to death.

I pay for Netflix. If they take my money and then stop delivering content to me without warning me ahead of time so I can cancel, they're intentionally defrauding me.

You are correct. The data running to/from your bank is highly congested. We suggest a check, made out to Cogent, in the amount of $100 million dollars will allow us to upgrade the Amiga we dedicated to your connection.

In similar news: "Electricity supply companies (ESPs) say that ~30% of their total electricity capacity is being consumed by client appliances. In order to support future demand, the ESPs will begin charging TV, dishwasher and other manufacturers for users' electricity usage."

Yeah, I know the analogy isn't perfect, so just allow me the joke of it.

I bet if the large content providers [Youtube, Netflix etc] stopped delivering for a week to any network that wanted to charge them extra for delivering content to the ISPs customers [that the ISPs own customers requested], maybe just put up a message to the customers saying something to the effect: "Due to un-fair and unrealistic demands by their ISP, $CONTENTPROVIDER can not deliver content to you. Please contact your ISP and demand that they treat all customer requested traffic fairly."

The ISPs would change their tune very quickly.

I agree it's worth a try.

Customers would start a riot.

But netflix/youtube/etc will almost certainly never do it. They, too, are profit seeking corporations. Don't forget that. In fact if netflix tried it without notifying paying customers well in advance, they'd probably get sued to death.

I pay for Netflix. If they take my money and then stop delivering content to me without warning me ahead of time so I can cancel, they're intentionally defrauding me.

They could just make Comcast a "sponsor" during certain opportune times....

If Netflix & YouTube & Facebook & other sites banded together en masse and in protest to shut out Comcast, esp. with a landing page to say call Comcast to discuss the issue, I think the tune would change.

No no no guys. Netflix just throws traffic as fast and as indiscriminately as it can into Comcast's network. Comcast's network engineers then have to pull the traffic out of the tubes and untangle it to send out to the customer that asked *Comcast* for the video. Comcast is clearly doing all the work here and deserves to get paid by everyone.

This does not make sense. Until very recently Netflix had no connection to the Comcast network so it was not possible that "Netflix just throws traffic as fast and as indiscriminately as it can into Comcast's network". Maybe Cogent does this, but not Netflix. Netflix has also offered to install equipment for free that would make things easier on Comcast and Comcast refused.

Comcast owns a large and complex network. Of course if needs large and complex routers to sort that network out. But Comcast is getting paid large amounts of money by its customers to do that. Comcast has billions in the bank. They just want to keep their 90% margins on Internet service and try to use their last mile monopoly to extract hostage fees for reaching their customers.

Comcast has never made a single peep about 'losing money' on providing Internet service. They simply don't want to spend money; but that doesn't mean they aren't already making huge profits. Comcast is clearly receiving enough revenue from their customers to cover the costs of correcting this issue without demanding even more payments for peering.

Cohen countered that customers who want RFD-TV can switch to Dish or DirecTV.

Yes, as long as

you don't live on the North side of a hill (as I do)

don't have an apartment on the north side of a building

don't have taller structures or trees just south from your 3rd floor space

live in a region that very seldom has heavy rainfall

can easily access the outside of your building

aren't a politics junkie who needs channels like C-SPAN-3

are OK with spotty availability of your most local PBS and other stations

…and generally want to forever forswear the many other “minor” cable channels available to the average American's 189 channels received, but not part of the music-channel padded list of 250 from the satellite providers.

Yes, there's absolutely no law on the books that forces you to use Comcast, unless you live in one of the United States' 30,000 cities and towns that have granted Comcast a monopoly on cable TV.

Oh, of course this doesn't even touch the fact that in many geo areas, Comcast is the ONLY practical high-speed internet connection.

Comcast argued that it could be considered a Tier 1 itself, as less than one percent of its traffic requires transit.

This is perhaps a seriously disingenuous statement, in that they are probably including their own service traffic (television streams and on-demand content) in the metric yet that would never require transit (because they do not allow the services outside the network).

They are not a Tier 1. They may have inter-city fiber run but it is not at the scale of Level 3 or Cogent (or Tata), and they do not have much third-party traffic running over it (a major requirement for Tier 1 labeling).

Remember how some networks stopped delivering their shows to certain cable companies over pricing disputes? Or vice-versa?

I bet if the large content providers [Youtube, Netflix etc] stopped delivering for a week to any network that wanted to charge them extra for delivering content to the ISPs customers [that the ISPs own customers requested], maybe just put up a message to the customers saying something to the effect: "Due to un-fair and unrealistic demands by their ISP, $CONTENTPROVIDER can not deliver content to you. Please contact your ISP and demand that they treat all customer requested traffic fairly."

The ISPs would change their tune very quickly.

Not to say that it wouldn't cost the content providers a little bit but ISPs like Comcast think they hold all the chips, but the truth is that the ISP is just an access point, and if they can't or won't deliver the services that the customer wants, then the customer will likely decide they don't need to be paying for it, whether they move on to a competitor [in the rare cases where one is available] or decide it's not worth paying for at all.

I know it's not a perfect idea, but dammit, somebody needs to smack the ISPs and tell them to get their collective heads out of their collective asses and I don't have any better ideas of how to do that.

They should quit using 'content provider',and use something such as 'highbandwidth content'. Because the 'highbandwidth content',can be technically dealt with. And saying 'content provider' w/o detailing the actual issue of 'high bandwidth', leaves everybody with nothing to coordinate to.

As if everybody will now stop and kneal to the passage of 'content provider' since this is something that is completely unattainable as a idea.

We need them to build out these networks,and continue to improvise,and upgrade the Internet communications technologies. Then keep the Internet user - irrespective of their business,aware,and able to gain contributions to further their goals in that respect. If for example there is a new video codec,that enables greater quality,and viewing transmissions,or if a program utilized can estabolish lower 'bandwidth'with the same quality. Why shouldn't we continue to try to keep that in relevance.?

Instead of doing this 'content provider' business,that doesn't do anything but distribute the bandwidth. Rather than upgrade the network,or provide technological superior programming to do more with less. While everybody waits for greater bandwidth networks.

I mean why sit in a flat,and think all day of having the 'content provider',save the day for 'anybody' ? Guess I just want my own controls. Same as anybody should have them. MEan why couldn't I trade off a cable channel of MPEG2 for the same up path to the Internet connection ?

Mostly because the ideal is for a 'cable industry',not necesarilly an Internet industry. Comcast would just assume the Internet industry is better suited for cable. Rather than cable being better suited for the INternet. Is cable really living in the 60s ?

If Netflix & YouTube & Facebook & other sites banded together en masse and in protest to shut out Comcast, esp. with a landing page to say call Comcast to discuss the issue, I think the tune would change.

The problem is that many of those companies operate on "free" model where convenience and easy access is crucial to keeping the product (the people signing up for accounts) from questioning the usage of the client (advertisers) and switching to another provider.

Also Comcast would love it if Netflix did that. You know since they already have a monopoly on a competing service. Sadly the existence of even local monopolies and nearly required usage means this is problem the markets won't solve—only exploit. The government needs to really stop in and either encourage true competition (i.e. policy that WON'T get the FCC Chairman a job after he leaves office) or common carrier regulation.

I think Mozilla's suggestions are interesting and bare examining.

EDIT: Netflix has been trying to do this for years with their wall of shame but the true is most of use only have one option for internet fast enough to utilize Netflix's services and that's usually Comcast/TW.

"Comcast argued that it could be considered a Tier 1 itself, as less than one percent of its traffic requires transit."

Perhaps that was not something they want to boast about in public. Some folks may feel Comcast is stating it is equal to a Telecommunications Company and perhaps needs to be viewed a Common Carrier. Sounds good to me, then if compared to the old AT&T they might be viewed as close to a monpoly and need to be broken up. Yeah Comcast, keep bragging.

Comcast would be very happy if only Netflix did it alone. However, if all the top social networks and video content providers banded together, that would be a different story, as legions of frothy-at-the-mouth FAcebookers, denied of their daily selfexposure, would be calling Comcast...

Comcast charging Cogent for access to its network is like a gated community demanding the local UPS, mail and newspaper delivery vehicles pay up in order to use its streets. Those vehicles only come there because people in the homes bought items they wanted to receive, and already paid for building and maintaining the streets.

Perfectly reasonable for the community owner/manager to set rules about parking, etc., but not to insist that FedEx pay extra to get in and out quicker… or at all.

If Netflix & YouTube & Facebook & other sites banded together en masse and in protest to shut out Comcast, esp. with a landing page to say call Comcast to discuss the issue, I think the tune would change.

What "tune?"

I'll be painfully honest here. I'm a netflix subscriber, though no longer a comcast subscriber. If my current ISP did get put on the streaming media "blacklist" and it lasted longer than about a week, you know what I'd do?

1. Cancel my netflix account.2. Drop my internet service to a lower tier.3. Live with youtube buffering. All I watch on youtube is crash videos anyway.

Now maybe #2 would be enough of a wakeup call to the ISP and maybe not, but I'm willing to try it. Those other services you mention? They aren't willing to try it. That's the part of my post that you quoted and responded to but did not address -- convincing youtube and the rest to give it a try.

How about instead of having the content providers stop delivering to Comcast customers, instead they limit the streams. Put up a message before the stream saying,

"Due to the unfair practices of your ISP and their unwillingness to upgrade their equipment to handle the data you have paid for, we are forced to reduce the quality of your stream in order to allow it to be viewable without data loss and buffering. Please contact your ISP and let them know that you demand they provide the proper infrastructure to deliver the service you pay them for. We're sorry for the inconvenience."

Then the paid providers like Netflix could provide a token discount for the inconvenience, and the ad-supported networks would still be able to deliver their ads, just at a reduced resolution. It'd likely still be cheaper than paying the ISPs for holding them hostage.

That should still get the customers mad at the ISP without making them too mad at the content providers, and perhaps would help usher in the changes that need to happen.

No no no guys. Netflix just throws traffic as fast and as indiscriminately as it can into Comcast's network. Comcast's network engineers then have to pull the traffic out of the tubes and untangle it to send out to the customer that asked *Comcast* for the video. Comcast is clearly doing all the work here and deserves to get paid by everyone.